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Great tips for increasing the credit score

By Ruth Racey
Published: Friday, June 22nd, 2012

The credit score plays a very important role in the life of an American. It is widely known that Americans are people who see the loans and being in debt as a way of life. They take loans for almost anything important they want to do in their lives, so it is common to hear that someone in checking the credit score for a new loan. The credit score is the one that has a vital role in the process of taking a loan; it can surely make the difference between receiving a loan that also has a great interest rate and being rejected on the application for a new loan. Luckily for those who have a bad credit score, things can be improved if a few tips are taken into consideration. Let’s find out more about them!

Paying on time

A lot of people are quite careless about their bills and forget about the fact that they have to be paid. Not paying on time, even though you passed over the due date with just a couple of days, will surely have a bad influence on the credit score. The spotless payment history is going to help you obtain the perfect credit score, one that can give you the chance of obtaining the loan you need for an important investment in your life. Those who have had payment issues in the past can definitely improve things by having a spotless one year payment history.

The use of less credit

The credit score is divided into percentages that are distributed to certain details. For example, the difference between the money owed and the money the creditor owns represents 30% of the credit score. Specialists say that the only way in which the credit score is not affected by this aspect is keeping the credit card balances at no more than 40% of their limit. Any creditor who goes higher than 40% should be aware that every additional penny will affect the credit score.

Checking the credit report

Some people simply ignore the credit report as they keep a track of their financial actions and think that this is enough. In fact, a regular checking of the credit report is very important. Financial institutions and banks can commit mistakes, but they are visible in the credit report. You should check it on a regular basis in order to find the possible mistakes and correct them, as these mistakes can seriously affect the credit score! For example, the credit report can show bankruptcy, but you might not have any problems of this type!

Other important tips

There are numerous other actions that can help you improve the credit score. For example, open and close accounts only when it is absolutely necessary. Also try to mix your credits, as a good mix can help the credit score very much! Follow these tips and you’ll see that the credit score will improve and reach a very good rate, one that can help you obtain any loan you might need!

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